Budgeting battle begins

Legislature 2001

Posted: Sunday, March 11, 2001

By BILL McALLISTERTHE JUNEAU EMPIRE

As the House Finance Committee began assembling the 2002 state operating budget Saturday, members talked more about a long-range fiscal plan "accidentally" than they have on purpose for the past 60 days, said Rep. Eric Croft.

Croft, of Anchorage, is one of four Democrats on the 11-member panel. The Democrats found themselves on the short end of constant 8-3 and 7-4 votes trying to restore Gov. Tony Knowles' public safety initiatives.

That led to a long philosophical discussion about the core functions of government and the resources to pay for them.

Republicans, who in 2000 finished a five-year mission of cutting

$250 million out of the state general fund, have referred to this year's budget as a "status quo" or "maintenance" budget, with small

increases to keep services at a constant level.

When Knowles unveiled his proposed budget in December, he said it was a general fund of about $2.41 billion, for a $145 million increase.

Republicans calculate the general fund differently. Going into Saturday's deliberations, they said their bill was $2.241 billion, or $63.5 million less than Knowles asked for. That also was $30.7 million more than the current budget, after accounting for increased debt service and most contractual salary raises, they said.

Through two days of public testimony and again Saturday in deliberations, Republicans acknowledged that many funding requests are legitimate.

"This is an attempt to do the best we can with limited resources," said Rep. Con Bunde of Anchorage.

They noted that the state will use $500 million or more from the Constitutional Budget Reserve to plug a budget gap, with that fund headed for depletion in five years at the current rate of draw down.

But Democrats pressed the issue, particularly on law enforcement proposals that they said reflected a central mission of government -- to protect the public.

In the general fund, a finance subcommittee approved only one of 10 new state troopers that the governor proposed, none of the eight constables or 20 village public safety officers Knowles asked for, and no salary increase for existing VPSOs. The full committee refused to overrule those decisions. About $4.3 million was at issue.

Rep. Carl Moses of Unalaska said it's "gutless" to allow the continuation of inadequate law enforcement in the Bush.

"If we have a homicide, can you imagine the trauma involved in waiting for a trooper to come 1,000 miles from Anchorage?" Moses said.

Bunde said the Republican budget "reflects what a majority of citizens at this time feel is adequate."

Ultimately, the state can fulfill its responsibilities only through a personal income tax in a long-range fiscal plan, Croft said. "If you're not willing to talk about that, you're really not willing to talk about how you provide public safety."

Rep. Bill Hudson, a Juneau Republican, who believes that some permanent fund earnings can be used for state government without lowering dividends significantly, said there should be a long-range plan "no later than next year."

Rep. Jim Whitaker, a Fairbanks Republican, said he doesn't want to see statewide taxes imposed until there is economic growth. "We have the fastest-shrinking economy in the United States."

Committee Co-Chairman Bill Williams, a Saxman Republican, said that he hoped people watching "Gavel to Gavel" on public access television would pressure legislators to act. The 1999 referendum in which 84 percent of voters rejected using permanent fund earnings "kind of scares us here," he said.

"What we do know is that vote did not take care of the problem we're faced with today," Williams said.

In long hearings Thursday and Friday, the committee took comments from about 200 Alaskans, said Co-Chairman Eldon Mulder of Anchorage.

Several recovering alcoholics begged the committee not to cut the governor's proposals for increased spending on treatment programs. Social workers said money isn't saved by cutting treatment programs because eventually it gets spent on the correctional system, welfare and mental health services.

"I'm tired of finding people dead ... frozen to the ground in their own urine," Janet Forbes of Gastineau Human Services told the committee. "I'm holding you all responsible as representatives and most importantly as human beings."

Jodi Rumph of Juneau brought in her three-year-old son, James, who had suddenly stopped talking at 13 months. Speech therapy and other services provided through the state's Infant Learning Program turned his condition around, she said. But it took four months to get off the waiting list, she said.

University of Alaska students and staff urged funding of the governor's requested $16.9 million increase. The budget target set by Republicans is a $9.4 million increase.

Legislators objected to the frequent use of the word "cuts" to describe reduction of the governor's requests.

"These are not cuts," Rep. John Harris, a Valdez Republican, said, noting that there is "no less" money available for alcohol- and drug-related programs, at $37 million. "It's very, very frustrating to me that this keeps coming up."

But Carl Rose, executive director of the Alaska School Boards Association, said that maintaining school funding at the same level is not benign.

"We've been at status quo funding for 15 years," Rose said. "I will challenge you: You are not fully funding K-12 education."

By allowing increased property taxes to offset state general fund money, "We're rekindling the argument of the 10-mill cap," Rose said, referring to the failed ballot initiative last fall on property taxes.

One witness who might be heeded was Loren Gerhard, executive director of the Southeast Conference, a non-profit organization of government and business leaders in the region. Gerhard urged the committee to sustain the Alaska Marine Highway System, which he said is critical transportation for Southeast.

Williams and Hudson drafted an amendment increasing the general fund appropriation for the ferry system by about $880,000, to $28.8 million. The amendment is intended to avert interrupted service through the end of the next fiscal year, on June 30, 2002.

The committee was expected to continue deliberations today. The budget will be on the House floor for a vote Tuesday, Mulder said.